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Transcript of Logistics
Nadege Person 12253416
Daniele Perez 12252027
Sara O'Dwyer 12253153 Founded to consolidate ordering shipping and deliveries
Serve 550 hospitals across Canada
Provide integrated ordering
One order, one bill, one shipment
Outsourced logistics, ordering, and A/R UPS Logistics Group Full supply chain services across the world
Serves 30,000 lines across eastern Canada per month
Four Ontario facilities, including CPDN
Committed order deadlines Canadian Pharmaceutical Distribution Network (CPDN) CPDN Hospitals UPS Orders
Payments Basic Info. Billing Comprised of 27 pharmaceutical companies Handles: order desk, warehousing, inventory control, picking & packing, transportation, and accounts receivable Global Logistics BMGT43500
28th January 2013 Utilise one interface to order from 27 different product portfolios Current Business Strategy Problems and Issues Management Approach and Analysis Market Strategy Limited number of activities
Emphasizes physical coordination to create synergy
Goal is to serve common customers
Focuses on reducing complexity Bowersox/Daugherty Model UPS CPDN Business Strategy Lower Logistics Decisions Logistics Strategy Discussion
Agreement Qualitative Quantitative Suppliers
Hospitals Delays in processing shipments & inventory discrepancies Late shipments Increasing complaints Hospitals are beginning to boycott CPDN & starting to order directly from suppliers/manufacturers
Last month: 2,000 lines back ordered & 1,000 orders were not shipped on time to customers Strained relationships and lack of trust concerns regarding collusive trade partners Lack of integration entities using different performance measures Only UPS being measured CPDN & UPS have identified need for revamp of performance metrics Introduction CPDN are focusing their efforts on 2 aspects: Establish a new set of key performance indicators Develop integration & collaboration Performance Measurement Performance measurement leads to high performing firms & improves overall operational function (Fawcett & Cooper, 1998) Monitor transport, warehousing, inventory and order processing Better overview and control Collected data and clear indicators Quality and value-added information Clearly defining, developing and implementing planning processes will greatly contribute to an organisations financial and operational success (Bracker et al., 1988) Developing Integration & Collaboration Supply chain is not only defined in terms of physical movement of goods but also in terms of information movement (Ayers, 2006) Firms can expect higher levels of operational and financial performance from formalised programmes to measure results (Carr & Pearson, 1999) Trust is the "cornerstone of strategic partnership" (Spekman, 1988) Lack of trust affects productivity & efficiency (Kwon & Suh, 2004) Logistics Strategy Agile Strategy High level of customer service by responding quickly to changing conditions For supply chains where it is important to maintain customer service and be responsive to rapid changes (Waters, 2009) Customer satisfaction
Open organisation that allows customers easy access
Cooperate with supply chain partners enough to respond quickly to changing conditions (Information Strategy) Inventory Discrepancies Inventory Discrepancies Focus on 3 decision areas: Inventories Need to determine control policies, appropriate stock levels and prevent future discrepancies Order processing Inventory auditing (Ryan, 2013) Need to operate a processing system design to improve processing orders and shipping backorders Counting and keeping track of items and merchandise Purchasing Need to develop supplier buyer relationship Items audited more frequently present lower levels of inaccuracy Communication Order Processing Performance levels will improve if both managers and employees have access to new important information (Korhonen and Pirtillä, 2003) Time Reduction Strategy Purchasing Relationship and Trust Aimed at guaranteeing fast delivery of product Eliminating activities that add no value and speeding up core activities Accountability Simplification
Resource planning (Waters, 2009) Cooperation among trading partners reduces uncertainty and increases levels of trust KPIs On-time deliveries
Length of promised order cycle times for in-stock products Minimise errors and misunderstandings and therefore establish a relationship based on trust and commitment (Kwon and Suh, 2004) KPIs Total customer satisfaction
Receiving turn-around time
On-time deliveries Partner scorecards: rate the strategic and operational fit Partner scorecards are key in evaluating a partner’s ability to engage in a business relationship (Fawcett and Cooper, 1998) Conclusion Greater information availability and accurate, detailed, relevant and timely information (Fawcett and Cooper, 1998) KPI's CPDN need to implement new strategies on
Order processing systems
Buyer-Supplier relationship Adopt a logistics strategy and establish clear lower logistics decisions Manufacturers performance in meeting promised delivery dates
Advanced notice on shipping delays
Suppliers ability to accommodate production schedule changes Then they use new key performance indicators to maintain a high performing supply chain Establish new set of performance indicators (Waters, 2009) (Waters, 2009) (Waters, 2009)
Ayers, J. (2006), Handbook of Supply Chain Management, 2nd ed., Florida: Auerbach Publications.
Bracker, J., Keats, B. and Pearson, J. (1988), “Planning and Financial Performance Among Small Firms in a Growth Industry”, Strategic Management Journal, 9(6), 591-603.
Carr, A. and Pearson, J. (1999), “Strategically Managed Buyer-Supplier Relationships and Performance Outcomes”, Journal of Operations Management, 17(5), 497-519.
Chow, G., Heaver, T. and Henriksson, L. (1994), "Logistics Performance: Definition and Measurement", International Journal of Physical Distribution & Logistics Management, 24(1), 17–28.
DeHoratius, N. and Raman, A. (2008), “Inventory Record Inaccuracy: An Empirical Analysis”, Management Science, 54(4), 627-642.
Fawcett, S. and Cooper, M. (1998), “Logistics Performance Measurement and Customer Success”, Industrial Marketing Management, 27(4), 341-357.
Korhonen, K. and Pirtillä, T. (2003), “Cross-Fuctional Decision-Making in Improving Inventory Management Decision procedures”, International Journal of Production Economics, 81-82(1), 195-203.
Kwon, I.W. and Suh, T. (2004), “Factors Affecting the Level of Trust and Commitment in Supply Chain Relationships”, Journal of Supply Chain Management, 40(2), 4-14.
McGinnis, M. and Kohn, J. (2002), “Logistics Strategy - Revisited”, Journal of Business Logistics, 23(2), 1-17.
Ryan, G. (2012), Global Logistics Strategy and Planning, BMGT43500 Global Logistics, UCD Michael Smurfit Graduate Business School, unpublished.
Spekman, R. (1988), “Strategic Supplier Selection: Understanding Long-Term Buyers Relationship”, Business Horizon, 75-81.
Waters, D. (2009), Supply Chain Management: An Introduction to Logistics, 2nd ed., New York: Palgrave Macmillan.
Waters, D. (2009), Supply Chain Management: An introduction to Logistics, 2nd Ed., UK: Palgrave Macmillan. REFERENCES & BIBLIOGRAPHY